Most breakthrough innovations take at least 5 years or more to come to scale. Most corporate business cases are three years or less.

This punishes innovators massively. Combine this with the fact that the tenure in most corporations is less than 5 years — and you have a no-win situation for innovation.

There are two ways to fix this: fancy and simple.

The fancy way is to capitalize your R&D efforts according to an empirically derived amortization schedule specific to sector. The easy way is to use a 5 year NPV on innovations, like Amazon does.

In this workshop, Manifold Partner John Sviokla and Director of Research at Valens Research Robert Spivey explained why, using insights from a 25,000 company global database on financial performance.

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